Why an Illinois bankruptcy might not turn out the way you think – Crain’s

Comment: While it's certainly true that we don't know today how a state bankruptcy would turn out, this article leaves much to be desired. It sometimes conflates municipal bankruptcy with state bankruptcy, but state bankruptcy could take many different forms, perhaps very different from municipal bankruptcy. It presumes what payment priorities would be, when in fact we don't know what priorities Congress would establish. It says spending on social services and public safety would be imperiled, when in fact preserving that spending is the entire point and undoubtedly would be prioritized. It says secured bondholders would lose out to unsecured bondholders and other creditors, when at worst they'd be treated equally and probably would be protected, as in municipal and other bankruptcies. It says that every-day contractors and healthcare providers would get stiffed, but there's no basis for saying that.

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